TERM LOAN AGREEMENT


                            Dated as of June 10, 2003

     This TERM LOAN AGREEMENT  (this  "Agreement") is entered into between NUWAY
MEDICAL,  INC., a corporation  organized under the laws of the state of Delaware
(the  "Borrower"),  and AUGUSTINE II, LLC, a limited  liability  company  formed
under the laws of the State of Delaware (the "Lender").  Capitalized  terms used
herein  shall  have the  meanings  ascribed  to such  terms in Section 8 of this
Agreement.

     In consideration of the mutual covenants and undertakings contained herein,
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby  acknowledged,  the  Borrower  and the Lender  hereby  agree as
follows:

                                SECTION 1. LOAN

SECTION 1.1. TERM LOAN.  Subject to the terms and conditions of this  Agreement,
the Lender  agrees to make loans to the  Borrower,  and the  Borrower  agrees to
borrow from the Lender, in the aggregate principal amount of four hundred thirty
thousand dollars ($420,000) (collectively, the "Term Loan"). The principal shall
be loaned as follows:  $250,000 on the date  hereof,  or as soon  thereafter  as
reasonably  practicable,  $100,000  on July 1, 2003 and the balance on August 1,
2003.  The Lender  hereby agrees to make such loans to the Borrower on the dates
so indicated,  with such payments to be made in immediately  available funds via
wire transfer or cashiers checks.

SECTION 1.2.  TERM NOTE.  The Term Loan shall be evidenced by a promissory  note
(the "Term  Note"),  substantially  in the form of  Exhibit A, with  appropriate
insertions, dated the date hereof, payable to the order of the Lender and in the
initial principal amount of $250,000.  The Term Note shall be revised to reflect
the additional loan installments  required to be made hereunder as and when such
loans are made.  The Term Loan shall be due and payable on FEBRUARY  29, 2004 or
at an earlier  date as provided  in Section 3.2 hereof (the "Term Loan  Maturity
Date").

                          SECTION 2. INTEREST AND FEES

SECTION  2.1.  INTEREST.  The  Borrower  agrees to pay  interest  on the  unpaid
principal amount of the Term Loan from time to time outstanding hereunder at the
following rates per year,  compounded monthly (with the result that the interest
accrued during each month is added to the principal  amount of the Term Loan and
subsequent  interest  shall be  calculated  in the same manner on the  increased
principal amount of the Term Loan):

          (a) before  maturity  of the Term Loan,  whether  by  acceleration  or
     otherwise, at the rate per annum equal to ten percent (10%).

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          (b) after the maturity of the Term Loan,  whether by  acceleration  or
     otherwise, until paid, at a rate per annum equal to fifteen percent (15%).

     SECTION 2.2. INTEREST PAYMENT DATE.  Accrued interest shall be paid in full
on the Term Loan Maturity Date.

     SECTION  2.3.  BASIS OF  COMPUTATION.  Interest  shall be computed  for the
actual  number of days  elapsed on the basis of a year  consisting  of 360 days,
including the date the Term Loan is made and excluding the date the Term Loan or
any portion thereof is paid or prepaid.

                      SECTION 3. PAYMENTS AND PREPAYMENTS

     SECTION 3.1. PAYMENTS.

          (a) Place of Payment.  All payments of principal,  interest,  fees and
     other amounts payable hereunder,  shall be made to the Lender at its office
     at 141 West Jackson Boulevard, Suite 2182, Chicago, Illinois 60604.

          (b) Form of Payment.  All payments of principal and interest  shall be
     made by wire transfer to the Lender.

     SECTION 3.2. PREPAYMENT.

          (a) Optional Prepayment. The Borrower may from time to time prepay the
     Term Loan or any portion thereof without premium or penalty.

          (b) Mandatory Prepayment.

               (i)  Within  thirty  (30)  days  following  the  last day of each
               calendar quarter during the term of this Agreement,  the Borrower
               shall make a prepayment of the Term Loan equal to the  Borrower's
               net income before  depreciation for such calendar  quarter,  less
               the ordinary  operating  expenses paid by the Borrower as well as
               its taxes  payable  during  that  period,  all as  determined  in
               accordance  with GAAP,  up to the total amount then due under the
               Term Loan.

               (ii)  Within  ten  (10)  days  of  the  occurrence  of any of the
               following  events,  the Borrower  shall make a prepayment  of the
               Term  Loan in an amount  equal to the  proceeds  received  by the
               Borrower,  in each case up to the total amount then due under the
               Term Loan, from:

                    (A) the sale of any of the  Borrower's  assets  outside  the
                    ordinary course of business; and

                    (B) any insurance payouts or condemnation  awards payable by
                    reason of theft, loss,  destruction,  damage,  taking or any



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                    other  similar  event with respect to any property or assets
                    of the Borrower  (provided,  however, so long as no Event of
                    Default or  Unmatured  Event of Default has  occurred and is
                    continuing  the Borrower may use such  insurance  payouts or
                    condemnation awards within thirty (30) days after receipt by
                    the  Borrower to replace  any such  property  with  property
                    performing the same or similar function).

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

     To induce the Lender to make the Term Loan,  the  Borrower  represents  and
warrants to the Lender that (except in each case as  otherwise  disclosed in the
Borrower's  filings  with the SEC and except with  respect to any  matters  with
respect to the delisting of the Borrower's shares from the Nasdaq):

     SECTION 4.1.  ORGANIZATION.  The Borrower is a corporation  existing and in
good standing under the laws of the State of Delaware;  each of its subsidiaries
is a corporation,  limited liability company or partnership duly existing and in
good  standing  under the laws of the state of its  formation;  the Borrower and
each of its subsidiaries are duly qualified,  in good standing and authorized to
do  business  in  each  jurisdiction  where,  because  of the  nature  of  their
activities  or  properties,  such  qualification  is required,  except where the
failure  to be so  qualified  would not have a  material  adverse  effect on the
Borrower's  business,  financial condition or results of operations (a "Material
Adverse  Effect");  and the Borrower and each of its subsidiaries have the power
and authority to own their  properties  and to carry on their  businesses as now
being conducted.

     SECTION 4.2.  AUTHORIZATION;  NO CONFLICT.  The borrowings  hereunder,  the
execution and delivery of this Agreement,  the Term Note and the Warrant and the
performance by the Borrower of its obligations  under this  Agreement,  the Term
Note and the  Warrant  are within the  Borrower's  corporate  powers,  have been
authorized  by all  necessary  corporate  action,  have  received all  necessary
governmental  approval  (if any  shall  be  required)  and do not and  will  not
contravene or conflict with any provision of law or of the charter or by-laws of
the Borrower or any subsidiary or of any agreement  binding upon the Borrower or
any subsidiary.

     SECTION 4.3. FINANCIAL STATEMENTS. The Borrower's audited consolidating and
consolidated  financial statements as at December 31, 2002, copies of which have
been furnished to the Lender, have been prepared in conformity with GAAP applied
on a basis  consistent  with that of the preceding  fiscal year,  and accurately
present the financial  condition of the Borrower and its subsidiaries as at such
dates and the results of their operations for the respective periods then ended.
Since the date of those financial statements, no material, adverse change in the
business,  properties,  assets,  operations,  conditions  or  prospects  of  the
Borrower or any subsidiary has occurred.  There is no known contingent liability
of the  Borrower or any  subsidiary  which is not  reflected  in such  financial
statements.

     SECTION 4.4. TAXES. The Borrower and its subsidiaries  have filed or caused
to be filed all  federal,  state and local tax returns  which are required to be
filed,  and  have  paid or have  caused  to be paid  all  taxes as shown on such


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returns or on any  assessment  received  by them,  to the extent that such taxes
have become due,  except as follows:  Borrower  has not filed its annual  report
with  the  Delaware  Secretary  of  State,  and owes to the  State  of  Delaware
approximately $6,400 in taxes for fiscal year 2002.

     SECTION 4.5.  LIENS.  None of the assets of the Borrower or any  subsidiary
thereof are subject to any  mortgage,  pledge,  title  retention  lien, or other
lien, encumbrance or security interest.

     SECTION  4.6.  ADVERSE  CONTRACTS.  Neither  the  Borrower  nor  any of its
subsidiaries is a party to any agreement or instrument or subject to any charter
or other  corporate  restriction,  nor is it subject to any judgment,  decree or
order of any court or governmental  body,  which may have a material and adverse
effect on the business, property, assets, operations, conditions or prospects of
the  Borrower  and its  subsidiaries  taken as a whole or on the  ability of the
Borrower to perform its obligations  under this Agreement,  the Term Note or the
Warrant.  Neither  the  Borrower  nor  any of its  subsidiaries  has,  nor  with
reasonable  diligence  should  have had,  knowledge  of or notice  that it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants  or   conditions   contained  in  any  such   agreement,   instrument,
restriction, judgment, decree or order.

     SECTION 4.7.  REGULATION U. The Borrower is not engaged principally in, nor
is one of the Borrower's important activities,  the business of extending credit
for the purpose of purchasing or carrying  "margin  stock" within the meaning of
Regulation U of the Board of Governors of the Federal  Reserve System as now and
from time to time hereinafter in effect.

     SECTION  4.8.   LITIGATION  AND  CONTINGENT   LIABILITIES.   No  litigation
(including   derivative  actions),   arbitration   proceedings  or  governmental
proceedings  are  pending  or  threatened  against  the  Borrower  or any of its
subsidiaries which would (singly or in the aggregate),  if adversely determined,
have a  material  and  adverse  effect  on  the  business,  properties,  assets,
operations, conditions or prospects of the Borrower or any subsidiary.

                              SECTION 5. COVENANTS

               Until all  obligations  of the Borrower  hereunder  and under the
Term Note are paid and fulfilled in full, the Borrower agrees that it shall, and
shall cause each of its  subsidiaries  to, comply with the following  covenants,
unless the Lender consents otherwise in writing:

     SECTION  5.1.  CORPORATE  EXISTENCE,  MERGERS,  ETC.  The Borrower and each
subsidiary  shall  preserve  and  maintain  its  corporate  existence,   rights,
franchises, licenses and privileges, and will not liquidate, dissolve, or merge,
or consolidate with or into any other corporation,  or sell, lease,  transfer or
otherwise  dispose  of all or a  substantial  part of its assets  (except  those
assets sold in the ordinary course of its business), except that:

          (a) Any subsidiary may merge or consolidate  with or into the Borrower
     or any one or more wholly-owned subsidiaries; and


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(b)      Any subsidiary may sell, lease, transfer or otherwise dispose of any of
         its assets to the Borrower or one or more wholly-owned subsidiaries.

     SECTION 5.2. INSPECTION.  The Borrower and each subsidiary shall permit the
Lender and its agents at any time during normal  business hours to inspect their
properties  and to inspect and make copies of their books and records,  provided
that the Lender agrees to enter into confidentiality  agreements with respect to
the foregoing.

     SECTION 5.3. USE OF PROCEEDS.

          (a) Use of Proceeds. The Borrower shall use the proceeds from the Term
     Loan solely for operating  costs,  including  but not limited to,  employee
     salaries and costs  associated with filing and obtaining SEC  effectiveness
     of the registration statement relating to the Lender's resale of the Common
     Stock  underlying  the  warrants  issued  by the  Borrower  on this date to
     Lender.

          (b) Margin Regulations.  Neither the Borrower nor any subsidiary shall
     use or permit any proceeds of the Term Loan to be used,  either directly or
     indirectly, for the purpose, whether immediate,  incidental or ultimate, of
     "purchasing or carrying any margin stock" within the meaning of Regulations
     U or X of the Board of Governors of the Federal Reserve System,  as amended
     from time to time.

          (c) Tender  Offers and Going  Private.  Neither the  Borrower  nor any
     subsidiary  shall use (or permit to be used) any  proceeds of the Term Loan
     to acquire any security in any  transaction  which is subject to Section 13
     or  14 of  the  Securities  Exchange  Act  of  1934,  as  amended,  or  any
     regulations or rulings thereunder.

     SECTION 5.4. COMPLIANCE WITH LAW. The Borrower and each of its subsidiaries
shall comply in all material  respects  with all laws and  regulations  (whether
federal,  state or local and  whether  statutory,  administrative,  judicial  or
otherwise) and with every lawful  governmental  order or similar action (whether
administrative  or judicial)  applicable to it, except in each case as would not
have a Material Adverse Effect.

     SECTION 5.5. AFFILIATE TRANSACTIONS. Not enter into any transaction with an
affiliate,  except for transactions in the ordinary course of business  pursuant
to the reasonable  requirements of the Borrower's or each subsidiaries' business
and upon fair and  reasonable  terms no less  favorable  to the  Borrower or the
subsidiaries than the Borrower or the subsidiaries  would obtain in a comparable
arms-length transaction.

                        SECTION 6. CONDITIONS OF LENDING

     The  obligation  of the  Lender  to make the Term  Loan is  subject  to the
following conditions precedent:

     SECTION 6.1.  DOCUMENTATION.  In addition to the  conditions  precedent set
forth in Section 6.2 and Section 6.3, the  obligation  of the Lender to make the
Term Loan is  subject to the  conditions  precedent  that the Lender  shall have


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received all of the following, each duly executed and dated a date acceptable to
the Lender, in form and substance satisfactory to the Lender and its counsel, at
the expense of the Borrower,  and in such number of signed  counterparts  as the
Lender may request  (except for the Term Note, of which only the original  shall
be signed):

          (a) Agreement. This Agreement;

          (b) Note. The Term Note;

          (c)  Resolution.  A copy of a resolution  of the Board of Directors of
     the  Borrower   authorizing  or  ratifying  the  execution,   delivery  and
     performance,  respectively,  of this Agreement,  the Term Note, the Warrant
     and the other documents  provided for in this  Agreement,  certified by the
     secretary or assistant secretary of the Borrower;

          (d) Pledge  Agreements.  Duly executed  pledge  agreements in form and
     substance  satisfactory  to the  Lender (a "Pledge  Agreement")  by (i) New
     Millennium  Capital  Partners,  LLC (a  "Pledgor")  in favor of the Lender,
     together with stock powers executed in blank, pledging all of its ownership
     interest in the pledged capital stock of the Borrower, and (ii) by Borrower
     (a  "Pledgor")  in  favor  of the  Lender,  pledging  all of its  ownership
     interest in NuWay Sports, LLC, a California limited liability company;

          (e) UCC Financing Statements.  Such duly executed financing statements
     and other documents  together with such other acts and things as the Lender
     may have  required  to  establish  and  maintain a valid lien and  security
     interest in the collateral described in the Pledge Agreement;

          (f)  Warrant.   A  duly   executed   warrant  in  form  and  substance
     satisfactory  to the Lender by the  Borrower  in favor of the  Lender  (the
     "Warrant"); and

          (g) Miscellaneous. Such other documents and certificates as the Lender
     may request.

     SECTION 6.2. REPRESENTATIONS AND WARRANTIES; NO DEFAULT.

          (a) Representations and Warranties.  At the date of the Term Loan, the
     Borrower's  representations  and  warranties set forth herein shall be true
     and correct in all  material  respects as at such date with the same effect
     as though those  representations  and warranties had been made on and as at
     such date.

          (b) No Default.  At the time of the Term Loan, and  immediately  after
     giving effect to the Term Loan,  the Borrower  shall be in compliance  with
     all the terms and provisions set forth herein on its part to be observed or
     performed, and no Event of Default or Unmatured Event of Default shall have
     occurred and be  continuing  at the time of the Term Loan,  or would result
     from the making of the Term Loan.

     SECTION 6.3. NO MATERIAL ADVERSE CHANGE.  No material adverse change in, or
effect  on, (a) the  business,  assets,  properties,  operations,  condition  or


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prospects of the Borrower or any of its  subsidiaries  or (b) the ability of the
Borrower to perform its obligations  under this Agreement,  the Term Note or the
Warrant,  in all  cases  whether  due to a  single  circumstance  or event or an
aggregation of circumstances or events, shall have occurred.

                               SECTION 7. DEFAULT

     SECTION 7.1. EVENTS OF DEFAULT. Each of the following occurrences is hereby
defined as an "Event of Default":

          (a)  Nonpayment.  The  Borrower  shall  fail to make  any  payment  of
     principal, interest, or other amounts payable hereunder when and as due; or

          (b) Default under Related Documents. Any default, event of default, or
     similar event shall occur or continue under any instrument, document, note,
     agreement,  or guaranty delivered to the Lender in connection with the Term
     Loan (including without limitation the Term Note, the Pledge Agreements and
     the  Warrant),  or any  such  instrument,  document,  note,  agreement,  or
     guaranty shall not be, or shall cease to be, enforceable in accordance with
     its terms; or

          (c) Cross-Default.  There shall occur any default or event of default,
     or any event which might  become such with notice or the passage of time or
     both, or any similar  event,  or any event which requires the prepayment of
     borrowed money or the acceleration of the maturity thereof, under the terms
     of any evidence of  indebtedness  or other  agreement  issued or assumed or
     entered into by the  Borrower,  any of its  subsidiaries  or the Pledgor or
     under the terms of any indenture,  agreement or instrument  under which any
     such  evidence  of  indebtedness  or other  agreement  is issued,  assumed,
     secured or  guaranteed,  in each case in respect of an amount that  exceeds
     $100,000,  and such event shall continue  beyond any  applicable  period of
     grace; or

          (d)  Dissolutions,  etc. The Borrower,  any  subsidiary or the Pledgor
     shall fail to comply with any  provision  concerning  its  existence or any
     prohibition against dissolution, liquidation, merger, consolidation or sale
     of assets; or

          (e) Warranties. Any representation,  warranty, schedule,  certificate,
     financial  statement,  report,  notice or other writing  furnished by or on
     behalf of the  Borrower,  any of its  subsidiaries  or the  Pledgor  to the
     Lender is false or  misleading  in any  material  respect on the date as of
     which the facts therein set forth are stated or certified; or

          (f)  ERISA.  (i)  Institution  of any  steps  by the  Borrower  or any
     subsidiary  to  terminate  a Plan if as a result  of such  termination  the
     Borrower or such  subsidiary  could be required to make a  contribution  to
     such Plan, or could incur a liability or obligation to such Plan, in either
     case in excess of $100,000; (ii) a contribution failure occurs with respect
     to any plan sufficient to give rise to a lien under Section 302(f) of ERISA
     with respect to any Plan; (iii) there shall occur any withdrawal or partial
     withdrawal from a Multiemployer Plan and the withdrawal  liability (without
     unaccrued  interest) to Multiemployer  Plans as a result of such withdrawal
     (including any  outstanding  withdrawal  liability that the Borrower or any


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     subsidiary  and any  ERISA  Affiliate  have  incurred  on the  date of such
     withdrawal)  exceeds $100,000;  or (iv) any "reportable"  event shall occur
     under  ERISA  in  respect  of any  employee  benefit  plan  maintained  for
     employees of the Borrower or any subsidiary; or

          (g)  Litigation.  Any suit,  action or other  proceeding  (judicial or
     administrative) commenced against the Borrower, any of its subsidiaries, or
     any Pledgor or with respect to any assets of the Borrower,  such subsidiary
     or such Pledgor,  shall  threaten to have a material and adverse  effect on
     the asset,  condition  (financial or otherwise) or future operations of the
     Borrower,  such  subsidiary  or  such  Pledgor;  or  a  final  judgment  or
     settlement  in excess of $100,000 in excess of  insurance  shall be entered
     in, or agreed to in respect of, any such suit, action or proceeding; or

          (h)  Noncompliance  with this  Agreement.  The Borrower  shall fail to
     comply in any material  respect with any  provision  hereof,  which failure
     does not otherwise  constitute an Event of Default,  and such failure shall
     continue for ten (10) days after the occurrence of such failure; or

          (i) Pledge  Agreement.  The Pledge  Agreement  shall be  repudiated or
     become unenforceable or incapable of performance; any Person other than the
     Lender shall obtain a security  interest or lien in the collateral  pledged
     pursuant to the Pledge Agreement; any court shall determine that the Lender
     does  not  have  a  first  priority  perfected  security  interest  in  the
     collateral pledge pursuant to the Pledge Agreement; or

          (j)  Warrant.   A  default  by  the  Borrower  in  the  observance  or
     performance of any of the covenants or conditions  contained in the Warrant
     or the Warrant  shall cease to be in full force and effect or the  Borrower
     shall so state in writing; or

          (k)   Bankruptcy.   Any   bankruptcy,   insolvency,    reorganization,
     arrangement, readjustment, liquidation, dissolution, or similar proceeding,
     domestic or foreign,  is instituted by or against the Borrower,  any of its
     subsidiaries or any Pledgor,  or the Borrower,  any of its  subsidiaries or
     the Pledgor shall take any step toward, or to authorize, such a proceeding;
     or

          (l) Insolvency.  The Borrower,  any of its subsidiaries or the Pledgor
     shall become insolvent,  generally shall fail or be unable to pay its debts
     as they  mature,  shall admit in writing its  inability to pay its debts as
     they  mature,  shall  make a  general  assignment  for the  benefit  of its
     creditors,  shall enter into any composition or similar agreement, or shall
     suspend  the  transaction  of all or a  substantial  portion  of its  usual
     business.

     SECTION  7.2.  REMEDIES.  Upon the  occurrence  of any Event of Default set
forth in subsections (a)-(k) of Section 7.1 and during the continuance  thereof,
the Lender or any other  holder of the Term Note may  declare  the Term Note and
any  other  amounts  owed to the  Lender  to be  immediately  due  and  payable,
whereupon the Term Note and any other amounts owed to the Lender shall forthwith
become due and payable. Upon the occurrence of any Event of Default set forth in


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subsections  (l)-(m) of Section 7.1, the Term Note and any other amounts owed to
the Lender shall be immediately and automatically due and payable without action
of any kind on the part of the Lender or any other holder of the Term Note.  The
Borrower expressly waives presentment,  demand, notice or protest of any kind in
connection  herewith.  The Lender shall promptly give the Borrower notice of any
such  declaration,  but  failure  to do so shall not  impair  the effect of such
declaration. No delay or omission on the part of the Lender or any holder of the
Term  Note in  exercising  any power or right  hereunder  or under the Term Note
shall  impair such right or power or be construed to be a waiver of any Event of
Default or any acquiescence therein, nor shall any single or partial exercise of
any power or right hereunder preclude other or further exercise thereof,  or the
exercise of any other power or right.

                             SECTION 8. DEFINITIONS

     SECTION 8.1. GENERAL. As used herein:

          (a)  "affiliate" of any Person means (a) any Person that,  directly or
     indirectly,  is in control of, is controlled by, or is under common control
     with such  Person,  (b) any Person who is a director or officer (i) of such
     Person,  (ii) of any  subsidiary  of such  Person  or (iii)  of any  Person
     described in clause (a) above or (c) in the case of a trust, its protectors
     or trustees,  any Person who is or has been a beneficiary  thereof,  or any
     Person  who is or has been  able to  appoint  a  beneficiary  thereof.  For
     purposes  of this  definition,  control  of a Person  shall mean the power,
     direct  or  indirect  (i) to  vote  25% or more  of the  securities  having
     ordinary voting power for the election of directors of such Person, whether
     by ownership of securities, contract, proxy or otherwise, or (ii) to direct
     or cause the  direction  of the  management  and  policies of such  Person,
     whether by ownership of securities, contract, proxy or otherwise.

          (b) "Agreement" shall have the meaning set forth in the Preamble.

          (c) "Borrower" shall have the meaning set forth in the Preamble.

          (d) "Code"  means the Internal  Revenue Code of 1986,  as amended from
     time to time.

          (e) "ERISA" means the Employee Retirement Income Security Act of 1974,
     as amended from time to time.

          (f) "ERISA Affiliate" means any corporation or trade or business which
     is a  member  of the same  controlled  group of  corporations  (within  the
     meaning of Section  414(b) of the Code) as such Borrower or is under common
     control  (within  the  meaning  of  Section  414(c) of the  Code)  with the
     Borrower.

          (g) "GAAP" shall mean generally accepted accounting  principles in the
     United  States  of  America  as in  effect  on the date of this  Agreement,
     consistently applied.

          (h) "Lender" shall have the meaning set forth in the Preamble.


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          (i) "Multiemployer Plan" means a multiemployer plan defined as such in
     Section  3(37)  of  ERISA  to which  contributions  have  been  made by the
     Borrower or any ERISA  Affiliate as a  "contributing  sponsor"  (within the
     meaning of Section 4001(a)(13) of ERISA).

          (j) "PBGC"  means the  Pension  Benefit  Guaranty  Corporation  or any
     entity succeeding to any or all of its functions under ERISA.

          (k)  "Person"  shall  mean  any   individual,   sole   proprietorship,
     partnership,    joint   venture,   trust,   unincorporated    organization,
     association,  corporation,  limited liability company, institution,  public
     benefit  corporation,  other entity or government (whether federal,  state,
     county,  city,  municipal,  local,  foreign,  or  otherwise,  including any
     instrumentality, division, agency, body or department thereof).

          (l) "Plan" means any plan, program or arrangement which constitutes an
     "employee  benefit  plan"  within the meaning of Section  3(3) of ERISA and
     which  is  maintained  or  contributed  to by the  Borrower  or  its  ERISA
     Affiliates for the benefit of their employees, including former employees.

          (m)  "Pledge  Agreement"  shall have the  meaning set forth in Section
     6.1(d).

          (n) "Pledgor" shall have the meaning set forth in Section 6.1(d).

          (o) "subsidiary"  means any corporation,  partnership,  joint venture,
     trust,  or other  legal  entity  of which the  Borrower  owns  directly  or
     indirectly 50% or more of the outstanding  voting stock or interest,  or of
     which the Borrower has effective control, by contract or otherwise.

          (p) "Term Loan" shall have the meaning set forth in Section 1.1.

          (q) "Term Loan  Maturity  Date"  shall have the  meaning  set forth in
     Section 1.2.

          (r) "Term Note" shall have the meaning set forth in Section 1.2.

          (s)  "Unmatured  Event of Default"  means an event or condition  which
     would  become an Event of  Default  with  notice or the  passage of time or
     both.

          (t) "Warrant" shall have the meaning set forth in Section 6.1(f).

Except as and unless  otherwise  specifically  provided  herein,  all accounting
terms in this Agreement  shall have the meanings given to them by GAAP and shall
be applied and all reports  required by this Agreement  shall be prepared,  in a
manner consistent with the audited financial  statements  referred to in Section
4.3.


                                       10
<PAGE>

     SECTION 8.2.  APPLICABILITY OF SUBSIDIARY AND AFFILIATE  REFERENCES.  Terms
hereof  pertaining to any  subsidiary or affiliate  shall apply only during such
times as the Borrower has any subsidiary or affiliate.

                            SECTION 9. MISCELLANEOUS

     SECTION 9.1.  WAIVER OF DEFAULT.  The Lender may, by written  notice to the
Borrower,  at any time and from  time to time,  waive any  Event of  Default  or
Unmatured  Event of Default,  which shall be for such period and subject to such
conditions  as shall be specified  in any such  notice.  In the case of any such
waiver,  the Lender and the Borrower shall be restored to their former  position
and rights  hereunder  and under the Term Note,  respectively,  and any Event of
Default or Unmatured  Event of Default so waived shall be deemed to be cured and
not  continuing;  but no  such  waiver  shall  extend  to or  impair  any  right
consequent  thereon or to any  subsequent or other Event of Default or Unmatured
Event of Default.

     SECTION  9.2.  NOTICES.  All  notices,  requests and demands to or upon the
respective  parties  hereto  shall be  deemed  to have  been  given or made when
deposited in the mail, postage prepaid, addressed:

          (a) if to the  Lender  to 141  West  Jackson  Boulevard,  Suite  2182,
     Chicago,  Illinois  60604,  Attention:  John T. Porter,  telecopy No. (312)
     427-5396,

          (b) if to the Borrower to 23461 South Pointe, Suite 200, Laguna Hills,
     California 92653, Attention:  Dennis Calvert,  telecopy No. (949) 454-9066,
     copy to John R. Browning, Esq, telecopy No. (949) 770-8666.

or to such  other  address  as may be  hereafter  designated  in  writing by the
respective parties hereto.

     SECTION 9.3. NONWAIVER; CUMULATIVE REMEDIES. No failure to exercise, and no
delay in exercising,  on the part of the Lender of any right, power or privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right,  power or  privilege.  The rights and remedies of the Lender
herein  provided  are  cumulative  and not  exclusive  of any rights or remedies
provided by law.

     SECTION 9.4. SURVIVAL OF AGREEMENTS.  All agreements,  representations  and
warranties  made  herein  shall  survive  the  delivery of the Term Note and the
making of the Term Loan.

     SECTION 9.5. SUCCESSORS.  This Agreement shall, upon execution and delivery
by the Borrower and  acceptance  by the Lender,  become  effective  and shall be
binding  upon and inure to the  benefit  of the  Borrower,  the Lender and their
respective successors and assigns,  except that the Borrower may not transfer or
assign any of its rights or interest hereunder without the prior written consent
of the Lender.

     SECTION 9.6.  CAPTIONS.  Captions in this Agreement are for  convenience of
reference  only and  shall not  define  or limit any of the terms or  provisions


                                       11
<PAGE>

hereof.  References  herein to Sections or provisions  without  reference to the
document in which they are contained are references to this Agreement.

     SECTION 9.7.  SINGULAR AND PLURAL.  Unless the context requires  otherwise,
wherever used herein the singular  shall include the plural and vice versa,  and
the use of one gender shall also denote the others where appropriate.

     SECTION 9.8. COUNTERPARTS. This Agreement may be executed by the parties on
any number of separate counterparts, and by each party on separate counterparts;
each  counterpart  shall  be  deemed  an  original  instrument;  and  all of the
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.

     SECTION 9.9. FEES.  The Borrower  agrees to pay or reimburse the Lender for
all costs and expenses of enforcing  this  Agreement,  the Term Note, the Pledge
Agreement  or the  Warrant,  or  preserving  its rights  hereunder  or under any
document or instrument executed in connection herewith (including legal fees and
reasonable time charges of attorneys who may be employees of the Lender, whether
in or out of court, in original or appellate proceedings or in bankruptcy).

     SECTION  9.10.  CONSTRUCTION.  This  Agreement,  the Term Note,  the Pledge
Agreement,  the  Warrant  and any  other  document  or  instrument  executed  in
connection  herewith  shall be governed by, and  construed  and  interpreted  in
accordance  with, the internal laws of the State of Illinois and shall be deemed
to have been executed in the State of Illinois.

     SECTION 9.11.  SUBMISSION TO  JURISDICTION;  VENUE. To induce the Lender to
make the Term  Loan,  as  evidenced  by the Term  Note and this  Agreement,  the
Borrower  irrevocably  agrees that,  subject to the  Lender's  sole and absolute
election, all suits, actions or other proceedings in any way, manner or respect,
arising out of or from or related to this  Agreement,  the Term Note, the Pledge
Agreement, the Warrant or any document executed in connection herewith, shall be
subject to  litigation  in courts  having  sites within  Illinois.  The Borrower
hereby consents and submits to the  jurisdiction of any local,  state or federal
court located within said city and state.  The Borrower  hereby waives any right
it may have to trial by jury,  to  transfer  or  change  the  venue of any suit,
action  or other  proceeding  brought  against  the  Borrower  by the  Lender in
accordance with this Section 9.11, or to claim that any such proceeding has been
brought in an inconvenient forum.



                            [SIGNATURE PAGE FOLLOWS]




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<PAGE>



         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed as of the day and year first above written.

                            NUWAY MEDICAL, INC.

                            By:
                                 ---------------------------------------------

                            Its:
                                  --------------------------------------------


                            AUGUSTINE II, LLC

                            By:      AUGUSTINE CAPITAL MANAGEMENT, L.L.C., its
                                     manager

                            By:
                                 ---------------------------------------------

                            Its:
                                  --------------------------------------------